The Consumer Financial Protection Bureau on Thursday released an update to its exam procedures on new mortgage regulations scheduled to take effect next year.
“We are committed to transparency around our examination process,” said CFPB Director Richard Cordray. “So we have worked hard to provide industry with advance notice of what we will be expecting. That, in turn, will improve compliance and benefit consumers.”
The new rules fall under the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). Thursday’s updates covered the Ability to Repay and Qualified Mortgage rules, high-cost mortgages and appraisals for higher-priced mortgage loans.
Among other things, the new rules taking effect in January would require lenders to verify a borrower’s finances and ability to pay back a loan over the long term – not just a low-rate introductory period; ban or limit some points, fees and risky features like interest-only payments; require loan servicers to provide regular statements and disclosures; restrict dual-tracking; and require lenders to use licensed or certified appraisers.
A complete copy of the RESPA exam procedures can be found here.
A copy of the TILA exam procedures released Thursday can be found here.